February 17, 1968
Bengzon, J.P., J.
FACTS
The Municipal Board of Ormoc City passed Ordinance No. 4, which imposed municipal tax of one percent per export sale to USA and other foreign countries of any and all productions of centrifugal sugar milled at the Ormoc Sugar Company (OSC).
The latter paid under protest but challenged the ordinance’s constitutionality on the grounds that it is violative of equal protection clause and uniformity in taxation. The CFI upheld the constitutionality of said ordinance, saying the taxing power of Ormoc City was broadened by the Local Autonomy Act to include all other forms of taxes, licenses, or fees not excluded in its charter.
RULING: For the OSC.
Ordinance No. 4 infringed the equal protection clause because the requirements of a valid classification were not upheld as it taxes only centrifugal sugar produced and exported by OSC and none other.
Although it is true that OSC was the only sugar central at the time the ordinance was passed, the ordinance still, to be reasonable, should be applicable to future conditions as well because even if later a similar company is set up, it cannot be subject to the tax because the ordinance expressly points only to OSC as the entity to be levied upon.
A classification is reasonable where (1) it is based on substantial distinctions which make real differences; (2) these are germane to the purpose of the law; (3) the classification applies not only to present conditions but also to future conditions which are substantially identical to those of the present; and (4) the classification applies only to those who belong to the same class.